Financial Management in Interreg Projects
For organisations seeking EU funding through Interreg, understanding financial management rules is a key part of participating in these programmes. Interreg is a series of EU funding programmes that support cooperation by bringing together organisations from across Europe and beyond to tackle shared challenges and create lasting connections.[1] Getting the cost categories right from the outset determines whether expenditure will be reimbursed — or rejected.
The Regulatory Framework
Cost categories eligible under Interreg Europe are defined by Regulation (EU) No 2021/1059, which sets out the rules for the current programming period.[2] This regulation defines the cost categories applicable in the programme. Understanding which regulation applies to your programme is the first step in sound financial management.
Eligible Cost Categories Explained
Under Interreg Europe's programme rules, one of the applicable cost categories is infrastructure and works — though this category is restricted exclusively to pilot actions.[2] Project teams must therefore carefully identify where pilot actions sit within their overall budget structure, since misclassifying these costs can create compliance risks during verification.
The programme also addresses where costs for pilot actions should be included in the budget, and whether local authorities require budget under external expertise to certify their expenses.[2] These are among the most frequently asked questions partners raise when structuring their financial plans.
Verification of Expenditure
Verification of expenditure is addressed directly in the programme's financial management guidance. Partners can report costs for the verification of expenditure of the final progress report, and country-specific information about the verification process is available to help partners navigate national requirements.[2] Verification ensures that public money is spent lawfully and that the ERDF contribution reaches its intended goals.
Budget Flexibility During the Project
One of the most practical financial management questions concerns whether budget changes are permitted during the project's lifetime.[2] Interreg programmes generally allow some degree of flexibility, but any modifications must comply with programme rules and be approved through the correct channels. Understanding these procedures in advance prevents delays in reporting and reimbursement.
The Scale of ERDF Investment
The importance of mastering these financial rules becomes clear when considering the scale of funding involved. France alone participates in 22 European territorial cooperation programmes representing 3.2 billion euros of ERDF.[3] Across the EU, the 2021–2027 Interreg period represents a significant public investment directed at boosting economic growth and regional cohesion, protecting the environment, and promoting sustainable development.[1]
What to Watch Next
The 2021–2027 programming period continues to generate questions around financial management rules. Data from the State of Interreg 2025 report continues to shape how the programme evolves.[1] Partners and applicants should monitor updates to country-specific verification requirements and any programme amendments that affect eligible cost categories. Keeping financial management procedures aligned with the latest regulatory guidance is the surest way to protect your project's funding.
If you want to stay ahead of every Interreg update and ERDF compliance change, start your free trial at EU Reporting and access the tools that help your organisation manage grant funding with confidence.